{"id":1488,"date":"2022-06-06T09:23:52","date_gmt":"2022-06-06T09:23:52","guid":{"rendered":"https:\/\/blog.nicarb.org\/?p=1488"},"modified":"2022-06-06T12:42:56","modified_gmt":"2022-06-06T12:42:56","slug":"notable-pronouncement-of-the-supreme-court-of-nigeria-on-the-need-for-litigants-to-respect-arbitral-awards","status":"publish","type":"post","link":"https:\/\/blog.nicarb.org\/index.php\/2022\/06\/06\/notable-pronouncement-of-the-supreme-court-of-nigeria-on-the-need-for-litigants-to-respect-arbitral-awards\/","title":{"rendered":"NOTABLE PRONOUNCEMENT OF THE SUPREME COURT OF NIGERIA ON THE NEED FOR LITIGANTS TO RESPECT ARBITRAL AWARDS."},"content":{"rendered":"\n

By: Uzoma Azikiwe,\u00a0Festus Onyia\u00a0and\u00a0Michael Ugah at Udo Udoma & Belo-Osagie<\/em><\/p>\n\n\n\n

Metroline (Nig.) Ltd. v Dikko <\/sup>(2021) 2 NWLR (Pt. 1761) 422.<\/strong><\/p>\n\n\n\n

In this case, the appellants, Metroline Nigeria Limited, Sheba International Limited, Axis Consulting, Design Matrix Associates and Inter Arc Concept Limited entered a joint venture agreement referred to as JVA 2004 (JVA). Clause 8 of the JVA provided that \u2018any dispute or question in connection with the Joint Venture or this deed shall be referred to a single arbitrator to be appointed by the Chief Judge of the [Federal Capital Territory, Abuja] in accordance with the Arbitration Act\/Law for the time being in force.\u2019 Disputes arose among the joint venture partners which caused the respondent, Alhaji Mukhtar Mohammed Dikko, to apply to the Chief Judge of the Federal Capital Territory, Abuja (FCT) to appoint a sole arbitrator pursuant to the JVA. The sole arbitrator that was initially appointed by the Chief Judge of the FCT for the reference recused himself because of some issues around bias, and the Chief Judge had to appoint another sole arbitrator who thereafter conducted the arbitration and published the final award dated 3 April 2017.<\/p>\n\n\n\n

The appellants were unhappy with the award and applied to the High Court of the FCT to have the award set aside, while the respondent simultaneously applied to the same court to have the award recognised and enforced as a judgment of the court. The High Court delivered a consolidated judgment wherein it refused to set aside the award but recognised the award for enforcement in the same manner as its judgment. The appellants were also dissatisfied with the judgment of the High Court and appealed to the Court of Appeal. The Court of Appeal, in a unanimous decision, dismissed the appeal. The appellants further appealed to the Supreme Court.<\/p>\n\n\n\n

The Supreme Court dismissed the appeal on technical grounds because the appellants\u2019 grounds of appeal were grounds of mixed law and facts for which the appellants were required to obtain leave of the Supreme Court pursuant to section 233(3) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) (the Constitution), but which leave was not sought and obtained. Given the failure of the appellants to seek and obtain the required leave of the Supreme Court, the respondent contended that the appeal was incompetent and urged the Supreme Court to dismiss it. The Supreme Court agreed with the respondent and dismissed the appeal.<\/p>\n\n\n\n

Although the appeal was not decided on the merits, one of the justices that heard the appeal, Justice Rhodes-Vivour JSC (now retired), took the opportunity to restate the supportive attitude of the Nigerian courts towards arbitration and deprecated the disturbing trend of filing all manner of unsubstantiated and spurious challenges to arbitral awards in Nigeria. Rhodes-Vivour, JSC in his supporting judgment stated:<\/p>\n\n\n\n

\u201cI intend to comment on the disturbing trend where all manner of appeals are filed against awards. It is time litigants fully understand, respect and appreciate the nature of arbitration agreements they freely enter into. It is the duty of counsel to explain the nature of these agreements and not encourage their clients to disregard them when they get unfavorable awards. Arbitration agreements ought to be respected and the resultant awards complied with. We should always bear in mind the importance of respecting arbitration agreements, more so those that have international connotations. Building up and sustaining a globally respected dispute resolution system are major steps for the growth of our Nation into a preferred investment destination.\u201d<\/p>\n\n\n\n

The Nigerian Legal System, following international standards, has legislated on the nature of arbitration awards to be final and binding and only to be interfered with by the courts in the exceptional circumstances enunciated in the relevant arbitration statutes. Arbitration is widely acknowledged as an alternative to litigation which enables expeditious dispute resolution. Commendably, the legal framework provides for court interference in specified circumstances only. However, the unfortunate trend in which litigants with the assistance of counsel who fail to appreciate their duties as officers of the court, all in a bid to win their clients\u2019 case by all means, bring unsubstantiated and spurious challenges against otherwise good arbitration awards and the arbitration tribunal, ought to be frowned upon and discouraged. The courts should not allow itself to be used as a tool to set side otherwise good awards or frustrate legitimate arbitration awards.<\/p>\n\n\n\n

Comments<\/strong><\/h4>\n\n\n\n

As already noted, the appeal was dismissed on technical grounds. However, the fact that Justice Rhodes-Vivour deemed it necessary to deprecate the unfortunate trend whereby parties to arbitration agreements mount all kinds of frivolous challenges to unfavourable awards underscores the Supreme Court\u2019s attitude to arbitration and frivolous challenges to arbitral awards. Although the Justice\u2019s statement in this respect is an obiter dictum given that the appeal was not decided on the merits, an obiter dictum of the Supreme Court, being the highest court in the country, carries a lot of weight and would usually influence the decisions of the lower courts in appropriate cases.<\/p>\n\n\n\n

Available statistics indicate that Nigerian courts are arbitration friendly and would, in most cases, enforce arbitral awards or deny challenges to enforcement of arbitral awards. A recent study\u00a0of arbitration-related court decisions by Nigerian courts that analyzed 49 cases in which the arbitral awards were directly challenged (\u2018challenge cases\u2019) (as opposed to cases where enforcement was resisted or opposed by the award debtors) revealed that 47 concerned domestic awards (constituting 96 per cent of the cases reviewed), while two cases concerned international awards (4 per cent of the cases reviewed). Out of the 47 domestic cases, 12 awards were successfully challenged (26 per cent), while the challenge was unsuccessful in 35 cases (74 per cent). The challenge in international arbitration was unsuccessful. In relation to enforcement proceedings, the report analyzed 41 cases under this category. Thirty-three of these cases related to domestic awards (80 per cent), while eight cases concerned international awards (20 per cent). Out of the 33 domestic awards, 26 were enforced (79 per cent), while seven were unenforced (21 per cent). Of the eight international awards, seven were enforced (88 per cent), while one was unenforced (12 per cent).<\/p>\n\n\n\n

While the report confirmed hitherto anecdotal evidence that Nigerian courts are arbitration friendly in terms of their ultimate determination of awards challenges, the trend whereby award debtors mount frivolous and unsubstantiated challenges to arbitral awards coupled with the protracted litigation that such challenges would usually involve tends to give a wrong impression about the efficacy of arbitration as a viable alternative to litigation. Given this backdrop, the Supreme Court\u2019s statement is very timely, and it is hoped that it will cascade down the judicial hierarchy and help to stem the ugly tide of frivolous challenges to arbitral awards. A decision of an arbitral tribunal awarding a relief that is contingent upon the fulfilment, on a future date, of a condition does not affect the finality or validity of the award.<\/p>\n","protected":false},"excerpt":{"rendered":"

By: Uzoma Azikiwe,\u00a0Festus Onyia\u00a0and\u00a0Michael Ugah at Udo Udoma & Belo-Osagie Metroline (Nig.) Ltd. v Dikko (2021) 2 NWLR (Pt. 1761) 422. In this case, the appellants, Metroline Nigeria Limited, Sheba International Limited, Axis Consulting, Design Matrix Associates and Inter Arc Concept Limited entered a joint venture agreement referred to as […]<\/p>\n","protected":false},"author":1,"featured_media":1490,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[84],"tags":[195,196,187,200],"class_list":["post-1488","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-nicarb-adr-developments","tag-adr-2","tag-arbitration-2","tag-nicarb-2","tag-nigeria-2","col-lg-4 col-md-6"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/blog.nicarb.org\/wp-content\/uploads\/2022\/06\/SUPREME-COURT-OF-NIGERIA.jpg?fit=660%2C350&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pcb80P-o0","jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/posts\/1488","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/comments?post=1488"}],"version-history":[{"count":10,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/posts\/1488\/revisions"}],"predecessor-version":[{"id":1532,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/posts\/1488\/revisions\/1532"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/media\/1490"}],"wp:attachment":[{"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/media?parent=1488"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/categories?post=1488"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/tags?post=1488"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}